Perspectives

A cottage industry has sprung up in the past decade with the sole focus of discrediting any good news on the economy. When President Obama was in office, the attacks mostly came from the right. With Presi dent Trump in Office, the attacks mostly come from the left. Since March 2009, regardless of who was in office, we have stridently argued that this recovery has legs.  The latest debate is over real (inflation-adjusted) GDP, which grew at a better than expected 2.1% annual rate in Q2. Some s… View More

If the temperature along the East coast this weekend wasn’t a reminder, with the dog days of summer also comes a shift in the market’s seasonal bias.  Ultimately, seasonality is a small consideration in our thinking, but it’s helpful in determining when to press or when to play more patiently.  With internal momentum starting to contract, we suspect the latter approach may prove prudent over coming weeks.  Whether it’s a market consolidation marked more in time or price is unknown, … View More

The equity markets treaded water for much of the week due to uncertainties related to the impact of last Friday’s strong jobs report on a potential rate cut.  On Thursday, the markets rose following Federal Reserve Chairman Powell’s Congressional testimony.  In describing the economy as “in a very good place,” he added that his main worry relates to global growth and that many Fed members “have come to the view that a somewhat more accommodative monetary policy may be appropriate.”… View More

While it’s hard to draw many conclusions from one of the lightest volume days of the year, we did find it notable that Friday’s weakness was not accompanied with any internal pressure.  In fact, advancing stocks actually outnumbered declining stocks +1.3 to 1 on Friday, despite the S&P finishing lower on the day.  Collectively about 83% of the S&P is trading above its respective 50-day moving average – consistent with a market that is likely short-term overbought, but more import… View More

The equity markets struggled to advance last week with investors focused on the G20 summit in Japan.  Presidents Trump and Xi met on Saturday; the markets interpreted President Trump’s comments on Thursday to suggest a possible resumption of negotiations.  During the meeting the two leaders were able to come up with a resolution to keep negotiations on track. The Russell 2000® Index led all indices with a 1.10% gain; the other major indices declined for the week: the S&P 500® Index d… View More

The equity markets rose last week with the announcement that Presidents Trump and Xi would meet at next week’s G20 summit in Japan.  Trade officials from both countries will meet before the summit to discuss a potential framework to restart negotiations.  Meanwhile, the Federal Reserve, as widely expected, left interest rates unchanged but confirmed its commitment to “act, as appropriate, to sustain the expansion.”  The Fed also removed the term “patient” in characterizing its outlo… View More

The pricing in of political risk has clearly become much more complicated in the past month, as the U.S. Administration has switched from a focus on tax cuts & deregulation to tariffs (or tariff threats) & increased tech regulation/antitrust.  This may not end anytime soon.  The offset will have to be elsewhere, and the market looks willing to give other actors (like central banks) the benefit of the doubt, at least for now.  We continue to stay tuned. Last week, the equity markets m… View More

The Bond Market, a number of market analysts and President Trump were all ahead of the Federal Reserve once again, in calling for possible rate cuts in 2019, even though there were no signs of recession yet. For several months last year there were calls that the Federal Reserve was tightening too quickly by raising rates and reducing their balance sheet at the same time (policy that had never been done before). The bond market signaled that the Fed was more than a little aggressive in tightening… View More

On Thursday, President Trump announced plans to impose tariffs on all imports from Mexico in an effort to stop migrants crossing into the U.S.  The tariff, effective June 10th, would begin at 5% and escalate at 5% intervals to a maximum of 25% in October.  The U.S. has never previously used blanket tariffs against another country; the President’s authority to do so is unclear.  The markets’ response was extremely negative; with all of the major indices declining for the week.  The Russe… View More

The reverberations from last week’s breakdown in trade talks between the U.S. and China and the sanctions placed on Huawei continued to roil the markets.  In particular, investors focused on the impact on Technology companies as the Nasdaq, the worst performing index, fell 2.29%, followed by the Russell 2000® Index (-1.41%), S&P 500® Index (-1.17%) and the Dow Jones Industrial Average (-0.69%).   Apple, which relies heavily on China for manufacturing and sales, fell 5.31% this week as… View More